Shares of Tesla are up 2.82% to $361.47 on Tuesday after the company announced a new executive compensation plan for its CEO, Elon Musk.

The new plan eliminates vehicle production targets and focuses Musk's compensation on stock, earnings, and revenue targets instead. The plan also requires Musk to be either CEO, or both Executive Chairman and Chief Product Officer, with all management reporting to him.

Musk joined the company in 2004, and has grown Tesla to its current $58 billion market cap. He's been able to help the company weather criticism it's faced after missing nearly every self-imposed production deadline, often by announcing new projects that shift focus away from the tough problems the company faces. Most recently, Musk announced a new Semi and Roadster model, while Tesla struggled to clear a bottleneck in its Model 3 battery production.

By tying executive compensation to the company's financial performance, Musk is somewhat encouraged to continue announcing flashy new projects that drive hype and excitement around the company. To be fair, more revenue and better earnings won't come from hype alone, but the hard production targets Tesla has struggled with are no longer part of the equation.

The company is currently working to meet its own production targets for its Model 3 and has had to push its 5,000 cars a week target back by a quarter.

Adam Jonas, an analyst at Morgan Stanley, wrote in a note to clients Tuesday morning that Musk's new compensation plan could net the CEO around $70 billion in pay if he hits all his new targets.

Tesla told Markets Insider that the total compensation will likely be closer to $55.8 billion, as stock dilutions from regular employee compensation, acquisitions, and raising capital would all lessen the total value of Musk's shares.

Jonas said that Tesla is entering an era where new competition in the electric and self-driving car space will challenge its ability to leverage its monopoly position in the market for stock growth. Tesla is fast approaching a "new and unprecedented era in the battle for capital and human talent," according to Jonas.

Jonas is neutral on Tesla and has a price target of $379.00, which is 6% higher than the company's current price.